- Joined
- Sep 4, 2018
- Messages
- 22
- Reaction score
- 20
I vaguely recall from high school economics that price controls cause shortages and surpluses. The laws of economics cannot be overruled with a decree.
Given the sudden demand for COVID19 tests and apparent difficulty obtaining a test by many people, it seems like there is a shortage instead of a surplus. I haven't heard of tons of effective tests that are sitting around unused in a warehouse that would be expected in a surplus.
Thus, I can deduce that the CMS's reimbursement is a price ceiling. Imagine if the price could be bid up to any market clearing price. Sure, it would be "price gouging," but it would also be a powerful incentive for producers to innovate, compete, and produce more.
Big picture, a price should be discovered. It should not set by a central planner or politician. Bigger picture, the government should not even have Medicare, Medicaid, etc and they should be phased out. Real suffering results in this case (and has resulted over past several decades in endless numbers of cases) from the price distortions, inhibition of innovation, and infringement of individual rights by force.
Given the sudden demand for COVID19 tests and apparent difficulty obtaining a test by many people, it seems like there is a shortage instead of a surplus. I haven't heard of tons of effective tests that are sitting around unused in a warehouse that would be expected in a surplus.
Thus, I can deduce that the CMS's reimbursement is a price ceiling. Imagine if the price could be bid up to any market clearing price. Sure, it would be "price gouging," but it would also be a powerful incentive for producers to innovate, compete, and produce more.
Big picture, a price should be discovered. It should not set by a central planner or politician. Bigger picture, the government should not even have Medicare, Medicaid, etc and they should be phased out. Real suffering results in this case (and has resulted over past several decades in endless numbers of cases) from the price distortions, inhibition of innovation, and infringement of individual rights by force.